All The Word’s Economy Is Candy And How To Get A Taste

When I was in 7th grade, my Home-Ec. Teacher, Mrs. Reed, gave a bag of candy to each kid and asked us to put a value on it. The total value was summed up and the number was written on the board. Then she asked us to buy and sell candy with each other for imaginary money.

After a day of trading, we were asked to sum up our imaginary money plus leftover candy. The resulting number was much higher than the original total value.

Why?

My classmates and I took to trading lesser-valued candy and trying to extract maximum moneys out of it. But there was something else at play.

We could say that the process of trading itself was the root-cause of the ballooned-up GCP (Gross Classroom Product)

I was reminded of this while reading a fascinating book on how we price things. The Price of Everything (Amazon Affiliate Link) is available now.

Stock Markets are exactly the same as Mrs. Reed’s 7th grade experiment with pre-pubescent intellectual midgets. And Stock Brokers, Hedge Fund Managers and CxOs are just as easily swayed by the forces of the trading system as I was in 7th grade. Except.

Except, Stock Brokers, Hedge Fund Managers and CxOs are strategically positioned to extract commission from each transaction.

Hence the creation of derivatives markets (subprime), parallel markets inaccessible to us mortals (cap and trade), stocks, mutual funds, and on and on and on…

Every time a transaction is made, the true value of anything will be altered. Even if it’s a fair deal for buying/selling parties, the process of transacting using intermediaries requires that these intermediaries be compensated thereby ballooning-up the value of analogized candy.

Multiply the transacting cost by about a billion times per year (number of stock and other transactions) and you end up with a gross amount that is just as imaginary as the money we used in 7th grade.

However, the system that extracts money from transactions is not going to cut-off it’s own legs.

It will continue to encourage transactions (how many times per day do you get a call to refinance your mortgage?) with all the players blissfully ignorant of the fact that they are the cause of the imaginary world economy that we have today.

Did you know that there are more mutual fund plans than there are actual mutual funds?

The system whose life-blood is transactions will continue to demand that we engage in transactions in order for the system to support itself; however, this system doesn’t contribute in any way to the overall production of candy.

Do you remember when the American industrial system used to produce…ahhh products? Products are tangible, but if there is no tangible product to sell then WHAT are we selling?

The answer? We are selling transactions. Ipso motherfuckin’ facto, no real product, no real economy.

The observant among you will notice that I’m sidestepping the issue of service economy but let’s skin that cat another day.

So what IS the solution?

I hope Ron Paul, now that he actually has the governmental power to do it, will be true to the title of his book and End the Fed (Amazon Affiliate Link)

While we’re at it, let’s dispose of Stock Exchange. Banks. The World Bank (most evil of all evil corporations). Transacting firms (like Goldman Sacks). Insurance giants (Tax payers should have rioted when US gov bailed out AIG) and similar corporate malarkey.

That would be a solid start.

Dino Dogan

Global Force for Badassery | Founder of Triberr | Refugee from Bosnia | Writer for Technorati | Speaker | Lousy Martial Artist | Pretty good singer/songwriter | Hi :-)

More Posts - Website - Twitter - Facebook - Google Plus

  • http://spinsucks.com Gini Dietrich

    What I want to know is how you ended up with the same amount of candy at the end as the beginning. I would have eaten mine.

    • http://diyblogger.net/about Dino Dogan

      lol…Ms. Reed ruled with an iron fist…she WAS the original Iron Man…aahhh…Woman…whatever, you get the idea lol

  • Pingback: Tweets that mention All The Word’s Economy Is Candy And How To Get A Taste -- Topsy.com

  • http://twitter.com/sampabon sampabon

    Just dropping by because I saw your post on quora …

    • http://diyblogger.net/about Dino Dogan

      hmmm…so Maybe Quora is not entirely useless lol Have you been using it? How do you like it?

  • http://twitter.com/jaennutter Julie Nutter

    Ah. And I knew there was a reason I liked you. You’d have gotten along well with me five years ago. I used to have all this research about corporations, taxation, …well, everything, even down to driving laws being … well, illegal.

    Suffice to say I was almost jumping up and down when reading this post going I KNOW! (What? I’m a geek. Sue me.)

    Anyway, I wish I could say more, but I’ve become much more censored than I used to be. (I know, that’s probably shocking especially when considering what I do say. =P)

    • http://diyblogger.net/about Dino Dogan

      I know…its amazing what they get away with….dont get me started

  • John

    Hey Dino,

    I’ve been having the same reservations about Quora. So far the vibe at the site strikes me as bizarre with one obsessive participant commenting on just about every thread on there so far.

    Still, I see no harm in allowing my account to stew and collect followers until things start rolling.

    • http://diyblogger.net/about Dino Dogan

      Have you tried vark.com? Thats the ting I dont get about quora…its this Johny come lately thing that everyone is talking about, meanwhile, vark has been doing the same thing (but better, I think) for two years…

      Man…having the right backing makes such a difference, doesnt it?

  • http://osakabentures.com/english-2/saulfleischman/ Saul Fleischman

    #Quora dynamics are totally different from #vark @dino_dogan The realtime/really worthless answerers provided by Vark put me off. Still loving the Q, though.

  • http://www.newbizblogger.com Michele Welch

    Hi Dino,

    Must admit, I was not expecting this conversation. But enjoyed reading it nonetheless.

    Anyway, ” the process of transacting using intermediaries requires that these
    intermediaries be compensated thereby ballooning-up the value” – isn’t that the way of the world. It probably started way back thousands of years ago with the first creation of a loaning system. There seems to be middle men in all we want to have; real estate, financial planning, buying a car.

    I know you cleverly through in the “service-based” system which is justifiable. It’s definitely an imperfect system. Our money constantly running through channels and others monitoring those channels and make money off of it whether we make money or not.

    I wonder what Ron Paul manages to achieve. I imagine changing the system will prove to be a challenge; albeit necessary one. ;-)

    Ciao!

    • http://diyblogger.net/about Dino Dogan

      Hey Mish :-) Great hearing from you…we should talk…add me to skype dino.dogan